Proud members of these trade organizations.
Do business with a member
The Nation's Master
of Master-Planned
Communities
With the No. 1 best-selling development in the U.S. and after a
successful 2010, Newland Communities positions itself for growth
in 2011 with new deals and additions to current communities. By Kristen Eichenmuller
Even with the struggling housing
market, some continue to dominate
the industry. Our 2010 "Developer
of the Year" holds an impressive,
successful portfolio, including five
of the nation's top 15 best-selling
master-planned communities
(MPC). San Diego-based Newland Communities,
the largest private developer of planned residential
and urban mixed-use communities in the U.S.,
developed 28 MPCs in 14 states.
"Newland is strategically positioned, with
projects in the majority of the top 30 housing
markets in the U.S," said Malee Tobias, vice
president of research. "These markets represent
about a quarter of the new-home activity in this
country (the markets Newland is in represent 27
percent of 2009 permits)."
Bob McLeod, Newland Communities'
chairman, president and chief executive officer,
referenced housing markets such as Houston,
Austin and Raleigh-Durham -- in addition to
Washington DC, which withstands large job
losses -- are likely to recover ahead of most
markets. "Geographic diversification and our
strong national platform have really helped us
weather the downturn. Several Newland markets
are currently experiencing strong positive job
growth, healthy inventory levels and low levels of
foreclosures and distressed sales."
Last year, national sales were up by
approximately 5 percent over 2008 numbers. In
March 2010, RLCO, an independent real estate
advisory firm, released its survey results from over
400 communities across the country. According to
the results, the majority of the top-selling masterplanned
communities were in the southwestern
region. Houston continues to prove itself as the
best overall performing market; with 887 net sales,
Newland Communities' Cinco Ranch was the
No. 1-selling MPC in 2009. Newland is the only
developer with two Houston communities on the
top 10 list with year-over-year sales growth.
The other 2009 top-selling communities
include Telfair in Houston, (No. 4) with 450 net
sales; Eagle Springs in Houston, (No. 13) with 206
net sales; Teravista in Austin, (No. 14) with 174 net
sales; and FishHawk Ranch in Tampa, Fla., (No.
15) with 159 net sales. Additionally, in September
2010, Telfair was named "Community of the Year"
by the Greater Houston Builders Association,
and FishHawk Ranch was named NAHB Green
Development of the Year in May 2010.
Although development depends on the
market, Newland's communities typically take
five to 10 years, from conception to completion.
From large-scale master-planned "new cities," that
range from 2,000 to 11,000 homes to smallerscale
communities with 500 to 2,000 homes, the
developer's typical project size usually ranges
from 2,500 to 3,000 homes. "In reality, the size will
be determined by a number of factors, including
location, availability of land, how open the local
jurisdiction is to development and resolving
local housing needs, and of course local market
dynamics," explained McLeod.
With such large projects, the chairman,
president and CEO sites entitlements and
approvals -- which can take one to 10 years --
as a big challenge in the development process.
Another challenge consists of understanding
the project's customers. For instance, with some
Newland communities close together -- as close
as five miles -- each community may appeal
to completely different homebuyers. "When
developing these communities, a developer could
make the mistake and think that what works in
one community will work just down the road, and
this would mean great failure," said McLeod.
Newland sells to both production and
custom builders. Relationships with the 100-
plus homebuilders includes top companies,
such as D.R. Horton, Pulte Homes, Lennar Corp.,
Centex, K. Hovnanian Homes, Ryland Homes,
Beazer Homes, Meritage Homes and
Taylor Morrison, among a lengthy list
of others. In business for 42 years,
Newland notes that its successful
MPC partly comes from these builders,
many which construct throughout various
developments. "They have put their trust in us,
and in our knowledge of the customer. They've
seen the kind of quality communities we create
and our ability to sustain this over time," said
McLeod. "They know that Newland is always
looking ahead, and for us, being successful
in this new economy comes down to three
things: speed and intelligent customer
insights; constant innovation; and realizing
that community really matters."
Teri Slavik-Tsuyuki, Newland Communities'
chief marketing officer, commented that
extensive research with visitors, with Newland
community homeowners and with Realtors
helps the developer discover the needs of the
individual buyer and to make sure product
segmentation and diverse offerings meet the
buyers' preferences. Also, partnering with a
national research firm that researched more
than 6,000 home shoppers in Newland's markets
revealed that buyers desire more affordable
price points; over the past two years, preference
for homes priced from $200,000 to $300,000
increased by 10 percent and for homes priced
over $400,000 decreased by 10 percent. Another
interesting insight was the shift in more couples
all age groups, including Boomers among the
traditional buyers of couples with kids.
With the year coming to a close and 2011
just around the corner, McLeod expects 2010
to meet or slightly exceed the company's goals
and is expecting a better year in 2011. "We are
on par now with last year's pace and expecting
a strong final couple of months of the year,
judging by our historical sales pace. And, we
expect 2011 to be much stronger than 2010 in
most of our key markets," he predicted. "Many of
our communities are bringing on new product
and are completing deals with new builders
now to set up for a very strong 2011."
For the upcoming year, Newland is focusing
on deals in approximately 20 target markets
where the developer currently operates and
may be able to expand in. "These markets have
solid growth drivers, are diversified, are the top
housing markets in the U.S., historically and
going forward. We are in active acquisitions
mode, and looking to acquire more projects
in key locations," said McLeod. The company
acquired large portfolios of communities from
other development companies, including from
Genstar in 2000 and from Terrabrook in 2003.
Current deals include launching a new activeadult
neighborhood at Estrella in Phoenix in
January 2010, which will consist of more than
1,700 home sites by Joseph Carl Homes. In
August, Pulte Homes purchased 131 finished
lots in the 4S Ranch community in San Diego,
and the builder plans to break ground in 2011.
In September, Newland Communities acquired
a 492-acre parcel adjacent to the developer's No.
1-selling MPC in Houston. The company's joint
venture with Sekisui House LTD., Japan's largest
homebuilder and leading diversified developer,
is planned for 1,200-plus new homes to be
delivered in approximately three years.
Over the last couple of years, the
company focused on finding new
sources of capital and to expand its
connections. "We spend a lot of time
working with and advising different
equity and debt groups and have
people dedicated to making these
relationships beneficial for both
sides," stated Vicki Mullins, executive
vice president and chief financial
officer for Newland Communities.
"We started that effort in earnest back
in 2007-2008 and have been very successful in
expanding the universe of capital partners as a
result. While MPC take years to develop, strong
financial partners must have a long-term focus,
fund required upfront infrastructure and receive
return of capital and exceptional risk-adjusted
returns as the project completes," said Mullins.
How has Newland become the nation's
largest private developer? According to McLeod,
its core operational expertise and systems are
implemented in different communities. "The size
and scope of our national platform and incredible
team of professionals mean we can learn from
one experience and apply it elsewhere," he noted.
The developer's chairman and CEO
emphasized the importance of knowing your
customer. With advice for other developers, Bob
McLeod said, "This business needs to start with
understanding how people want to live and
creating product and community that meets
those needs. Secondly, explore innovative ways
to create value for your investors, your teams
and your customers (while still keeping costs
down and making money)."
When asked to comment about being chosen
as our 2010 "Developer of the Year," McLeod
commented by saying, "We are extremely
honored and pleased because we know we have
a lot of great peers out there who create amazing
communities. And I am personally very proud of
our teams of talented, committed professionals
throughout the company who continue to look
for new ways of doing things and who create
incredible places to live all across this country."
Kristen Eichenmuller is the editor of Builder
and Developer magazine. She may be contacted
at keichenmuller@penpubinc.com.
